DISPROPORTIONS AND DEVELOPMENT CONFLICTS

Besides the fact that an advanced economic and political level autonomy of Kosova had resulted in the creation of new development energies, the development rhythm and dynamics did not succeed to solve the substantial problems. The Yugoslav economy crisis, the problems in the economic system, and the intensification of political problems, since the beginning of the eighties had been strongly reflected in Kosova.

	National product per capita in US$	Relative position (%)
Kosova	700	27.8
Macedonia	1.536	60.9
Bosnia & Herzegovina	1.655	65.7
Montenegro	1.827	72.5
Undeveloped	1.440	57.1
Serbia	2.285	90.7
Vojvodina	3.134	124.4
Croatia	3.280	130.2
Slovenia	5.779	229.3
Developed	3.194	126.7
Former Yugoslavia	2.520	100

The economic development level of Kosova in former Yugoslavia was rather low in comparison with the average, in particular with the developed regions. It was such as the half of the development level of other undeveloped federal units, around 22,3% of Vojvodina, 21,3% of Croatia, and only 12,1% of Slovenia. Such a low development level had a negative impact, especially in the social-economic situation of the population and their standard of living.

The presented figures illustrate the development disproportion and contradictions, which generated a lot of economic, social and political problems. These disproportions in development resulted in a lot of serious consequences in economic development. These have been created for a long time under the operation of institutional and system factors of former Yugoslavia. The relief of these regulations remain as a long term commitment. These problems were expressed in some fields, especially in structural disproportions, labour capable population of population and employment possibilities, system problems and efficiency of development, foreign debts and exports, as well as with regard to social development and budget-public consumption.

The economic growth of Kosova was put in direct connection to natural resources through strengthening of the basis of raw materials, especially by the construction of large energy capacities and basic industries. Depending on external sources of development financing, there are a lot of large structural contradictions. Regarding this, it should be mentioned that by the end of the eighties, Kosova created a high participation at the former Yugoslavia level in these complexes: electric-energy 7,0%, coal production 14,1%, ferric-alloy 9,0%, the production of lead-zinc metal 32%, refined lead-alloy 52%, refined silver 67%, while the participation in the national product of Yugoslavia was about 2,0%.

Such a high participation of these complexes had influenced these contradictions within the economy of Kosova. So, the energy, non-ferrous metals, ferrous metallurgy in complete, had a participation in the national product of the industry 45,0%, in employment 35,0%, and 60,0% in fixed funds.

In accordance with the one-sided industrial concepts as a basis of economic growth, higher consideration was given to the material extractive factors, and less to the non-material factors. Not influenced by the pressure of competition, in and out, an environment for the conservation of such contradictions was created. The reduction of the importance of non-material factors (advanced science and technology, modern management, strengthening of the scientific component in development,) had an impact on deactivating the population potentials capable to work. Through the impact of a development and system mechanism, Kosova for a long period remained at its initial phase of development. By the material support coming from the former Yugoslavia Federal Fund, the main products were financed in order to keep the balance in former Yugoslavia, but on the other side that intensified the worsening of structural contradictions and dependency of the economy of Kosova in the economic structure of former Yugoslavia.

In the international relations, the tertiary sectors were permanently very important for the economic development, while these in Kosova remained at a very low development level (northern Italy 54%, Portugal 54%, Turkey 45%, while Kosova 25%).

The level of industrialization was shown by an increased participation of industry and a decrease of the participation of agriculture in the national product, so that by the end of the period, the participation of industry was 47,4%, agriculture 20,4%, while other activities participated with about 32 %. (tab. no.3). As a special form of the economic structure problem, there are some deformations created among the primary, secondary and tertiary sectors. In the framework of the primary sector, agriculture had an increased participation, as well as forestry and hydro-economy. The participation of the secondary sectors had been conditional to mining industry and construction. The development level of tertiary sectors was determined by the development of communications, trade and handicrafts, tourism and other services.

A very low participation of the tertiary sectors, shows the quality of the economic development. Such a development orientation was realized by a long term investment concentration into the main branches of energy capacities and non-ferrous metals. The industrial development was in disproportion with strategic orientations for creating more possibilities for the employment of the population. A special aspect of the industrial structure of Kosova, represents the disproportion within the industrial complexes itself, as a consequence of the low product processing and finalization level based on comparative priorities in development.

The table above shows the domination of branches, which have no particular effects in the employment of the population: energy participated about 40 % at fixed assets, while in employment with 15% only, and in creating the national product with 26%, etc. Such a participation of energy decreased the possibility for a structural change in favor of the processing sectors of industry, which would be more efficient than the branches where such relations are more favorable. Even in the framework of other complexes structure disproportion was expressed. This can be illustrated by the following figures:

So, it is evident that every sector was dominated by raw materials and semi finished products. This is a fact testifying that processes of structural and technological transformation in industrial development were neglected.

The size of the companies has also a significant importance in the development dynamics. Small and medium-size companies had a symbolic participation in the company structure (companies with 60 employees participated with only 11,2% in the number of companies.) (tab. no.14, 15).

One of the basic problems creating structural disproportions were the limited possibilities to activate the appropriate contingent capable to work. This contingent was increased much faster than new jobs, so that its participation at former Yugoslav level was increased from 4% to about 7%, between the years 1965 and 1988, at a time when the participation in the total number of Yugoslav employees was about 3,4%.

Such a low employment level stirred much more the social-economic population structure. During the period of 1971-1990, the employment rate in Kosova was increased from 16,6% to 40,8 %. The industrialization process in Kosova, and the concepts of public property position, did not leave any space for economic development activities in the private sector. The participation of the employed in the private sector was reduced from 4,4% in 1970 to 2,4 % in 1988.

The main problem was that 63% of the population was not included in economic activities.

The impacts of the mechanism of the economic system of former Yugoslavia in the economy of Kosova were contradictory. Although to Kosova and other undeveloped federal units was provided support for development through the Federal Fund for crediting, the effects of such investments were somehow neutralized through the price policy, monetary and crediting policy, customs and the system for promotion of exports. Instead of providing an economic growth, increasing the self-financing level, and stimulation of transformation processes, by operating the system mechanism, opposite effects have been reached. The system of export-import price control in combination with restrictive selective foreign trade regimes, had a very negative impact to the economic position of the electric energy and basic metals, dominating in the economy of Kosova. In this connection, it should be mentioned that in 1988 the economy of Kosova 63,9% of the industrial products, had a free price making procedure, while in Yugoslav level it was up to 71%, in Croatia 74%, Slovenia 83%, Serbia 76%, and Vojvodina 71%.

More than half of the electric energy of Kosova went to the domestic market with depressed prices. The enterprises with high level processing, which were less represented in the industrial structure of Kosova, through systems mechanism were put on an unfavorable position. These industrial sectors were protected from foreign competition, and were substituted in the domestic market for higher prices, compared to those in the foreign market. Under these disparity conditions, the energetic, metallurgic and extractive capacities, with a high level of foreign debts, were faced with many serious problems during their normal operation.

These system mechanisms of a redistribution character, helped that the developed parts of former Yugoslavia become large centers of processing industries and exports, while other parts, in particular Kosova, became a center of energetic and metallurgical products. All these system mechanisms determined also the factors of efficiency, and the development financing system of Kosova as well. This way, an unfavorable structure of interior financial sources for development was realized. During the period of 1966-1989, the Federal Funds participated with 64,1% of fixed funds investments in the public/social sector. A special problem was the fact that all the infrastructure projects, energetic and metallurgic projects were financed by crediting funds. Because of the lack of its own funds, the development was based on foreign financing sources. Such an extensive financing structure and system mechanism obstacles resulted in an increase of development costs and influenced an investment efficiency. During the period between 1961-1970, in 100 investment units, there were 17,8 increased units of the national product, while during the period of 1971-1988, to increase a unit of the product, should be invested 8,8 investment units. This is explained by the investment structure, system factors and weaknesses in the development management

During the eighties, foreign debts and its structure reached a serious and complicated proportion, having in mind development capacities of the economy of Kosova. So in 1987, the foreign debt of Kosova was 975 mill. US$, out of which 90% were to the convertible markets. In these debts, financial credits were 45 %, while equipment credits were up to 53%. The source structure was dominated by: IBRD 20%, UE countries 40%, industrialized-developed countries 19 %, and other countries 21 %. According to the debt concentration, the largest participants were the following: Electro-economy (37 %), Feronickel (17 %), Trep�a (15 %), infrastructure facilities (9 %), agri-complex (1 %), and other organizations (21%).

The exports of Kosova were not sufficient, neither in quantity nor in quality. During the period of 1980-1990, with certain oscillations, it remained at a low level and with an unfavorable structure. (tab. no.20).

The exports were mostly based on the industry. Main exporters are represented complexes such as: energy, non-ferrous metals, ferrous metallurgy, and production of machines and electric appliances. These four complexes had a following participation per year: 60,3 % (1984), 66,5 % (1985), 59,9 % (1987), and 64,6 % (1988). (tab. no.22). It is important to mention that the exporting activity took place also in other branches of industry, primary in the metal processing activity, production of communication (traffic means), production and processing of chemical products, textile (fabrics) production, rubber production, etc. According to the products, a higher participation in exports had the industry of batteries, production of spare parts for cars, and other products. The export value in 1990, reached an amount of 171 mill. US$ while the value of imports was 191 mill. US$. During this period, the highest export Kosova had in 1988, 222 mill. US$, which represents 1,7 % of the Yugoslav exports.

The development model has conditioned also the quality of the social development, especially its dynamics and the social-demographic structure.

The public consumption per capita in Kosova during the first part of the eighties had achieved only 51-52% of Yugoslav level. But, since 1985, the economic and political trends in former Yugoslavia, were reflected with a reduction in supplementary funds for public consumption in Kosova, which was an agreed constitutional category. That reduced the level of public consumption in 41% during the next years. (tab. no.11).

The situation in the social sectors were in a direct connection with the fact that Kosova was very late included in its own social development. In 1952, Kosova had 1,2 doctors per 1000 inhabitants, 0,6 automobiles per 1000 inhabitants, a symbolic number of students, etc. Several decades later, in particular after 1970, starts a new era in social development. But, there existed a contradiction between ambitions for a faster national and social progress, which was declaratively allowed by the former system, and financial resources to meet these reflections.

The social development of Kosova in the past was supported by its own funds and funds provided by the budget of former Yugoslavia. Regarding the aid of former Yugoslavia for the social development of Kosova, there have been many speculations intending to show that such a development was highly depending on these funds. But the public and budget income analyses in Kosova prove for much more flexibility in the structural relations: its own sources participated with 75,3%, while additional funds from the federal budget were 24,7 %.

Kosova had an organized system and structure of public institutions, and solid fiscal instruments for social development financing.

2.4. DISPROPORTIONS AND DEVELOPMENT CONFLICTS